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Glossary appraisal well An exploration well drilled for the purpose of identifying extensions to known fields or discoveries. barrel/bbl The standard unit of measurement for all production and sales. One barrel equals 159 litres or 35 imperial gallons. boe bopd the Company D,D&A development well exploration well farm-out (farm-in) fracture stimulation hydrocarbons LPG Mbbls MIM MMbbls MMboe monobore well petroleum liquids PJ PSC reserves reservoir Santos seismic survey Barrels of oil equivalent. The factors used by Santos to convert volume of different hydrocarbon production to barrels of oil equivalent are printed below. Barrels of oil per day. Santos Ltd and its subsidiaries. Depreciation, depletion and amortisation of building, plant and equipment, exploration and development expenditure. A well drilled to enable production from a known oil or gas reservoir. A wildcat or appraisal well drilled to find new reserves of oil or gas. An agreement which provides for a party to acquire an interest in a permit by either fully or partially funding an agreed program of work to be conducted in the permit. A technique used to improve hydrocarbon recovery from reserves with poor permeability or porosity. Fracture stimulation involves the fracturing of the reservoir rock to encourage the flow of hydrocarbons. Solid, liquid or gas compounds of the elements hydrogen and carbon. Liquefied petroleum gas. Thousand barrels. MIM Holdings Ltd (formerly Mt Isa Mines). Million barrels. Million barrels of oil equivalent. A well which has a single casing and no internal tubing. Crude oil, condensate, or its derivative naphtha, and the liquefied petroleum gases propane and butane. Petajoules. Joules are the metric measurement unit for energy. A petajoule is equal to 1 kilojoulex 10 12 . The equivalent imperial measure to joules is British Thermal Units (BTU). One kilojoule = .9478 BTU. Production sharing contract. Proved and probable reserves as defined by the Australian Stock Exchange Ltd (ASX). Proved reserves are those reserves that, to a high degree of certainty, are recoverable, at commercial rates, under presently anticipated production methods, operating conditions, prices and costs. Probable reserves are those reserves that may be reasonably assumed to exist because of geophysical or geological indications and drilling done in regions which contain proven reserves. Reserves reported are based on, and accurately reflect, information compiled by full-time employees of the company who have the requisite qualifications and experience prescribed by the ASX Listing Rules. A rock formation in which hydrocarbons are present. Santos Ltd and its subsidiaries. A survey used to gain an understanding of rock formations beneath the earth’s surface. TJ Terajoules. Joules are the metric measurement unit for energy. A terajoule is equal to 1 joule x 10 12 . wildcat well An exploration well drilled to identify new accumulations of oil or gas. 32 WMC WMC (formerly Western Mining Corporation). boe conversion factors Crude Oil 1 barrel = 1 boe Sales Gas 1 petajoule = 171.937 boe x 10 3 Condensate/Naphtha 1 barrel = 0.935 boe LPG 1 tonne = 8.458 boe
Corporate Governance The purpose of this statement is to provide details of the main corporate governance practices the Company had in place during the past financial year. The Board of Santos Limited is committed to good corporate governance and to this end has had in place for a number of years formal guidelines recording the Board’s policy on: Board composition and appointment of chairman; Board membership and attendance; the appointment and retirement of Directors; independent professional advice; compensation arrangements; external auditors; risk management; and ethical standards. References in this statement to the “Board guidelines” are to the formal guidelines in force during the past financial year. The Board guidelines are reviewed by the Board on an annual basis and as required. Board of Directors and its Committees The Board is responsible for the overall corporate governance of the Company including its strategic direction and financial objectives, establishing goals for management and monitoring the attainment of these goals. To assist in the effective execution of its responsibilities, the Board has established a number of Board Committees including a Nomination and Remuneration Committee, an Audit Committee and an Environmental Committee. The Nomination and Remuneration Committee comprises all non-executive Directors and each of the Audit and Environmental Committees comprises a majority of non-executive Directors and is chaired by a non-executive Director. The Board guidelines prescribe that the Board is to meet at least 10 times a year. All current non-executive Directors, including the Chairman, are considered to be ‘independent’ Directors, as defined in the 1997 guidelines of the then Australian Investment Managers Association. Composition of the Board The names and details of the experience, qualifications, age, special responsibilities and shareholdings of each Director of the Company are set out on pages 22 and 23 of this Annual Report. The composition of the Board is determined in accordance with the Company’s Constitution and the Board guidelines including: the Board is to comprise a minimum of five and a maximum of ten Directors (exclusive of the Managing Director); the Board should comprise a substantial majority of non-executive Directors (currently the Board comprises six non-executive and two executive Directors); there should be a separation of the roles of Chairman and Chief Executive Officer of the Company; and the Chairman of the Board should be a non-executive Director. Under the Board guidelines, it is the responsibility of the Nomination and Remuneration Committee to devise the criteria for, and review membership of, and nominations to, the Board. The primary criteria adopted in selection of suitable Board candidates is their capacity to contribute to the ongoing development of the Company having regard to the location and nature of the Company’s significant business interests and to the candidates’ age and experience by reference to the age and diversity of experience of existing Board members. When a Board vacancy exists or where it is considered that the Board would benefit from the services of a new Director with particular skills, the Nomination and Remuneration Committee has responsibility for proposing candidates for consideration by the Board and, where appropriate, engages the services of external consultants. Prior to appointment, each Director is provided with a letter of appointment which, inter alia, encloses a copy of the Board guidelines governing board operation, membership and corporate governance, including detailed regulations relating to disclosure of interests and guidelines for dealing in securities, together with the requisite form for completion in compliance with those regulations. The expectations of the Board in respect to a proposed appointee to the Board and the workings of the Board and its committees are conveyed in interviews with the Chairman and access provided to appropriate executives in relation to details of the business of the Company. Corporate Governance Santos Ltd and Controlled Entities 33
Page 1 and 2: s nt os a Santos Annual Report 1998
Page 3 and 4: Although the majority of the Compan
Page 5 and 6: Strategy Santos aims to generate in
Page 7 and 8: Chairman’s Overview 1998 The Boar
Page 9 and 10: 1998 was a record year for Santos p
Page 11 and 12: Santos’ employees made a signific
Page 13 and 14: In 1998 Santos achieved an explorat
Page 15 and 16: Operating Profit After Tax A net pr
Page 17 and 18: 1998 Exploration Highlights ■ A s
Page 19 and 20: Further longer-term growth opportun
Page 21 and 22: Santos’ Australian Gas Business S
Page 23 and 24: Review of Performance Environment T
Page 25 and 26: Michael Anthony O’Leary DipMinE,
Page 27 and 28: OABU USABU SEABU Offshore Australia
Page 29 and 30: Offshore Australia Business Unit 19
Page 31 and 32: Production Statistics Field Units S
Page 33: Licence Area % Interest Licence Are
Page 37 and 38: Risk Management The Board has in pl

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